Assume that both the lessor and the lessee have the same interest and tax rates and there are no transaction costs.Given this,the best lease agreement results in:

Question

Quizplus · Accepted Answer

In a scenario where both the lessor and lessee have the same interest and tax rates and there are no transaction costs, the best lease agreement would result in a net present value (NPV) of zero for both parties. This is because the lease payments from the lessee to the lessor would exactly offset the cost of the asset and the interest and tax expenses, leaving neither party with a financial gain or loss from the lease agreement itself.

Assume That Both the Lessor and the Lessee Have the Same